Investment Fees, Advisor Compensation, and Added Value

Despite the strong argument about the advantages of lower fees, I think most people are not wired to be do it yourself investors. There is no doubt some can do it but more people can’t, won’t and don’t want to do it themselves.

If you are not wired to do it yourself, they you need to find help from investment and financial advisors who can help you make better investing decisions.

If you hire an advisor to help you, then you are likely to pay higher fees to compensate your advisor for that advice / help / service. Read More…

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Replies to this Post

Tyussays:

When you check the forbes list of wealthiest people it is no surprise to see fund managers as the richest making upwards of $500 million in cash in one successful year. That is crazy. And all they do is sit on their butts — even if they are wrong they get paid very well. Crazy world!

Cullensays:

There is no point paying extraneously. Thankfully people should be putting there money in index funds which have low costs.

Manav Esays:

Its true that most people dont think twice about fees because it is so embedded (and hidden) from their view. People need to be more educated.

Kassidy Meekersays:

I recall a study done by the post and how a their staff just tossed darts and picked stocks where they hit. At the end of the year they compared results with mututal fund managers and they came out on top despite being purely by random. So paying fees is silly when you get nothing in return.

Brandt Winstonsays:

Yes it isnt just fees but poor advisors too. Imagine paying fees with 0 advisor quality. This is what you get from most bank services who offer their own funds. I try to minimize my fees for most cases but at times i dont have a choice since some funds have bundles that fit what i am looking for.

Hans W.says:

People still pay ME?!? With the advent of ETFs there is no use.

Pierce Psays:

And therein lies the problem. Most discount brokers out there in connection with management fund firms are all too eager not to disclose fees because they too get a piece of that pie.

Emiliosays:

Damn it now i have to check my holdings. I didnt realize i could be getting charged without knowing. I figured i’d just get a bill in the mail or something.

Reagansays:

Good read but i think fund managers get a bad break. I dont mind the fees because i guess i am an active holder of funds and look to more information on my holdings that i cant get when fees are lower.

Leonel B.says:

In my 30+ years of trading i have never understood the value in funds with high fees. They don’t perform any better and in the long-term you loose more. Look for the lowest fees at all times. No if, ands, or buts.

Clinton Ssays:

Anyone who buys into funds without fully being aware of fees is asking for trouble.